Regional LNG: Woodside sees further Pluto commitments in Q1 2006

Woodside Petroleum Ltd, , Australia's biggest independent oil and gas producer, said on Wednesday it expects to agree further sales commitments for liquefied natural gas (LNG) from its Pluto project in the first quarter of 2006, agency reported.

The news follows Tuesday's announcement that Tokyo Gas will buy 1.5 million to 1.75 million tonnes per year (tpy) of LNG from the $3.8 billion Pluto project starting from 2010, as well as a 5 percent equity stake.

A Woodside spokesman said negotiations were continuing with north Asian customers with a view to completing preliminary agreements for the remainder of the 3.5 million to 4.0 million tonnes of Pluto LNG. Woodside said last week it had agreed commercial terms, without identifying the customers.

The Pluto LNG project is expected to produce between 5 million and 7 million tonnes of LNG per year, based on reserves of 3.5 trillion cubic feet (tcf) of natural gas. Sales deals are crucial if Woodside is to move forward with the investment and begin production by 2010.

Woodside has also said it is in talks with U.S. customers for more supply deals, with demand for natural gas expected to continue to grow faster than oil as users shift to cleaner fuels to cut carbon emissions.

LNG marketers have been bullish on the prospects for sales deals as demand grows in fast-growing, fuel-hungry nations like China and India, but the high price of natural gas has turned off some potential buyers who are unable to pass along higher costs.

That has driven dome sellers back to mainstay Asian customers like Japan, the world's top LNG importer, which absorbs about half of the global supply every year.(*)